The biggest development in Santa Clara’s history has morphed to include light industrial use that will likely be used to host data centers.
At its meeting July 8, the Santa Clara City Council narrowly accepted a proposal from Related Santa Clara, the developer of the proposed massive 240-acre mixed-use development to be located at 5155 Stars and Stripes Dr. near Levi’s Stadium.
Related’s proposal asked the city to allow a large portion of the site originally earmarked for office space to be converted into industrial use. A portion of that office space will be incorporated into the mixed-use retail segment of the development.
The development will retain its 1,680 apartments, 15% of which will have rents set as 100% area median income (AMI) — as opposed to the previous 10% of units at 120% (AMI).
“These revisions are designed to preserve the city’s long-term oversight and public commitments, provide flexibility to advance early phases of the development, adjust rent obligations specific to data center uses and update the performance schedule to align with current economic conditions,” said City Manager Jovan Grogan.
The site will feature 800,000 sq. ft. of retail, 700 hotel rooms and 1.6 million sq. ft. of industrial use. Although no tenant has been secured, that industrial use could accommodate uses such as research laboratories, commercial storage or manufacturing. A majority of the area is likely to be used to house data centers.
Steve Eimer, executive vice president with Related, told the council that several force majeure events — extraordinary events out of the developer’s control — have waylaid the project.
Among those were delays in regulatory approvals, the collapse of First Republic Bank — with whom Related had a lease — the stalling of construction on a Silicon Valley Power (SVP) substation that is supposed to supply power to the development and the COVID-19 pandemic.
The increase to the project’s below-market-rate housing reinforces the city’s housing access and equity, said Afshan Hamid, community and economic development director. Additionally, she said, the changes “allow for the preservation of the City Center vision,” allowing the city to “keep the heart of the project as a regional mixed-use focal point.”
“This adjustment would introduce a greater amount of flexibility with the plan, creating new opportunities for economic development and position the city to a wider range of technology and innovation-based companies, and it also enhances the city’s ability to remain adaptive and competitive in a dynamic and regional economy,” she said.
Any data centers built on the site would pay double ground rent to the city. While public comments supported the project overall, many worried it would exacerbate already dire parking issues in the area.
Representatives from the city’s BMX track that sits in the footprint of part of the development spoke. They asked Related to consider giving the operator 18 months notice as per the original agreement instead of the year notice contained in the changes — a request to which Related agreed.
Despite public support, some council members weren’t thrilled with the changes.
Council Member Suds Jain said the city got a raw deal and should have been getting more money over the years while Related was unable to build.
“We wanted Santana Row on steroids. We are not getting that. We haven’t gotten that for a long time. We are going to get data centers first,” Jain said. “I don’t understand why we haven’t been paid any money for any of the other parcels.”
Jain also said he didn’t like that the agreement failed to obligate Related’s adherence to the city’s climate action plan, which he was instrumental in getting adopted. He said he couldn’t support the proposal until he was sure any data center built on the property would be carbon-free.
Vice Mayor Kelly Cox accused some of her council colleagues of “posturing,” saying “we don’t get to create a retail wish-list.”
“This, to me, isn’t a developer whim. This is responding to a necessity. This isn’t an act of practicality or preference. This is what we need to do,” she said.
She called the potential for data centers in the project its “financial backbone” and accused others of “getting in the weeds.”
Council Member Kevin Park joined Jain’s dissent, countering Cox’s characterization.
“These changes, they are not weeds,” he said. “They are actually the future of this city and of climate and of resources, and if those are weeds, then we are going to live in weeds, because these are the important things we need to consider when we have these projects.”
After Cox moved that the council approve the proposal, Jain moved the same motion but with a mandate that data centers be carbon-free.
That motion failed in a 3-4 vote, with Jain, Park and Council Member Raj Chahal supporting it. But Council Members Karen Hardy and Albert Gonzalez explained that they were unsure how the council could ensure that, especially if the development were going to secure energy from SVP.
Cox’s original motion passed in a 4-3 vote, with Jain, Park and Chahal dissenting.
Consent Calendar Spending
The council approved the following spending in one motion via the consent calendar:
- A $4.08 million contract with O’Grady Paving, Inc. for bikeway and pavement rehabilitation.
- A $1 million purchase/service agreement with Doble Engineering Company for test equipment, software and service. The agreement goes through March 2030.
- A five-year, $2.5 million contract with Peninsula Crane and Rigging for Silicon Valley Power for crane services.
- A $2 million purchase order with ESC Spectrum (ESC) for Data Acquisition and Handling System for data acquisition and historian system support and maintenance at SVP.
- A $558,000 contract with Arrow Fencing for emergency operations center security upgrades.
- A $261,256 increase to an agreement with N. Harris Computer Corp. for NorthStar customer connect portal integration with CyberSource and the energyIP integration modernization. Total contract is now $1.03 million with authority to the city manager to increase that total by another $300,000.
- An “urgency ordinance” to award $20 million to “various vendors in connection with the implementation of security measures” at city sites. The consent calendar does not list the vendors, and the contracts did not go out to bid.
The next regularly scheduled meeting is 7 p.m., Tuesday, July 15 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.
Members of the public can participate in the Santa Clara City Council meetings on Zoom at https://santaclaraca.zoom.us/j/99706759306; Meeting ID: 997-0675-9306 or call 1 (669) 900-6833, via the City’s eComment (available during the meeting) or by email to PublicComment@santaclaraca.gov.
Contact David Alexander at d.todd.alexander@gmail.com
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